# BLACKBAUD INC (BLKB) Informational only - not investment advice. CIK: 0001280058 SIC: 7372 Services-Prepackaged Software SIC breadcrumb: [Services](/division/I/) > [Business Services](/major-group/73/) > [SIC 7372 Services-Prepackaged Software](/industry/7372/) Latest 10-K filed: 2026-02-18 SEC page: https://www.sec.gov/edgar/browse/?CIK=1280058 Filing source: https://www.sec.gov/Archives/edgar/data/1280058/000128005826000006/blkb-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-18 · accession 0001280058-26-000006 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001280058.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 1,128,365,000 USD | 2025 | verified | | Net income | 114,970,000 USD | 2025 | verified | | Assets | 2,390,682,000 USD | 2025 | verified | | Free cash flow | 257,783,000 USD | 2025 | computed | | Net margin | 10.19% | 2025 | computed | | Operating margin | 16.91% | 2025 | computed | | Revenue YoY | -2.27% | 2025 | computed | | ROE | 135.17% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | BLKB | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 10.2% | 1.5% | 69 | 122 | | Operating margin | 16.9% | 1.3% | 80 | 121 | | Revenue growth | -2.3% | 13.5% | 11 | 124 | | FCF margin | 22.8% | 19.3% | 64 | 120 | | ROE | 135.2% | 2.0% | 100 | 112 | | ROA | 4.8% | 0.9% | 67 | 124 | | Liabilities / equity | 27.11 | 0.91 | 99 | 113 | | Current ratio | 0.79 | 1.57 | 11 | 124 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 7372 Services-Prepackaged Software, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 1128365000 | USD | 2025 | 2026-02-18 | | Net income | 114970000 | USD | 2025 | 2026-02-18 | | Assets | 2390682000 | USD | 2025 | 2026-02-18 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-18. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001280058.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2011 | 2012 | 2013 | 2014 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | 788,487,000 | 848,606,000 | 900,423,000 | 913,219,000 | 927,740,000 | 1,058,105,000 | 1,107,080,000 | 1,154,624,000 | 1,128,365,000 | | Net income | | | | 28,290,000 | | 73,633,000 | 44,841,000 | 11,908,000 | 7,717,000 | 5,698,000 | -45,407,000 | 3,018,000 | -299,524,000 | 114,970,000 | | Operating income | | | | 46,364,000 | | 68,178,000 | 59,417,000 | 27,145,000 | 37,243,000 | 24,906,000 | -28,485,000 | 46,353,000 | -271,377,000 | 190,754,000 | | Gross profit | | | | 290,983,000 | | 426,583,000 | 466,864,000 | 481,999,000 | 485,154,000 | 484,545,000 | 552,716,000 | 599,055,000 | 631,426,000 | 663,292,000 | | Diluted EPS | | | | 0.62 | | 1.54 | 0.93 | 0.25 | 0.16 | 0.12 | -0.88 | 0.06 | -5.92 | 2.37 | | Operating cash flow | | | | 102,277,000 | | 176,290,000 | 201,385,000 | 182,477,000 | 147,955,000 | 213,661,000 | 203,893,000 | 199,634,000 | 295,969,000 | 265,550,000 | | Capital expenditures | | | | 13,911,000 | | 10,208,000 | 14,719,000 | 11,492,000 | 29,690,000 | 11,664,000 | 12,289,000 | 4,685,000 | 7,443,000 | 7,767,000 | | Share buybacks | 0.00 | 0.00 | | | | | 0.00 | 0.00 | 41,001,000 | 108,416,000 | 0.00 | 18,831,000 | 418,034,000 | 217,152,000 | | Assets | | | 706,610,000 | 943,183,000 | | | 1,615,305,000 | 1,992,963,000 | 2,044,734,000 | 2,971,617,000 | 2,992,703,000 | 2,912,279,000 | 2,496,000,000 | 2,390,682,000 | | Liabilities | | | 545,066,000 | 757,267,000 | | | 1,241,522,000 | 1,596,199,000 | 1,618,584,000 | 2,254,557,000 | 2,248,671,000 | 2,103,574,000 | 2,369,161,000 | 2,305,628,000 | | Stockholders' equity | | | | | 269,078,000 | 336,289,000 | 373,783,000 | 396,764,000 | 426,150,000 | 717,060,000 | 744,032,000 | 809,903,000 | 126,839,000 | 85,054,000 | | Cash and cash equivalents | | | 11,889,000 | 14,735,000 | | | 30,866,000 | 31,810,000 | 35,750,000 | 55,146,000 | 31,691,000 | 31,251,000 | 67,628,000 | 38,914,000 | | Free cash flow | | | | 88,366,000 | | 166,082,000 | 186,666,000 | 170,985,000 | 118,265,000 | 201,997,000 | 191,604,000 | 194,949,000 | 288,526,000 | 257,783,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2011 | 2012 | 2013 | 2014 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | 9.34% | 5.28% | 1.32% | 0.85% | 0.61% | -4.29% | 0.27% | -25.94% | 10.19% | | Operating margin | | | | | | 8.65% | 7.00% | 3.01% | 4.08% | 2.68% | -2.69% | 4.19% | -23.50% | 16.91% | | Return on equity | | | | | | 21.90% | 12.00% | 3.00% | 1.81% | 0.79% | -6.10% | 0.37% | -236.15% | 135.17% | | Return on assets | | | | 3.00% | | | 2.78% | 0.60% | 0.38% | 0.19% | -1.52% | 0.10% | -12.00% | 4.81% | | Liabilities / equity | | | | | | | 3.32 | 4.02 | 3.80 | 3.14 | 3.02 | 2.60 | 18.68 | 27.11 | | Current ratio | | | 0.64 | 0.68 | | | 0.74 | 0.74 | 0.81 | 0.77 | 0.75 | 0.78 | 0.78 | 0.79 | ## As-reported value updates 5 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/BLKB/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001280058.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-09-30 | | | -0.20 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -0.28 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | | | 0.04 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 2,105,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 277,626,000 | | 0.17 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 295,011,000 | 5,399,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 279,250,000 | 5,246,000 | 0.10 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | 5,246,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 287,286,000 | | 0.42 | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 21,804,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 286,727,000 | | 0.40 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 302,232,000 | -330,764,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 270,661,000 | 4,867,000 | 0.10 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 4,867,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 281,382,000 | | 0.54 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | 282,000,000 | 26,466,000 | 0.55 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 295,256,000 | 36,689,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 281,140,000 | 31,139,000 | 0.67 | reported discrete quarter | | 2026-Q2 | 2026-03-31 | | 31,139,000 | | reported discrete quarter | | 2026-Q2 | 2026-06-30 | 290,597,000 | | 0.79 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from BLKB's latest 10-K: [/company/BLKB/business/](/company/BLKB/business/). ## Risk Factors Verbatim Item 1A Risk Factors from BLKB's latest 10-K: [/company/BLKB/risk-factors/](/company/BLKB/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1280058/000128005826000025/blkb-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-07-29 Report date: 2026-06-30 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited, condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis presents financial information denominated in millions of dollars which can lead to differences from rounding when compared to similar information contained in the unaudited, condensed consolidated financial statements and related notes which are primarily denominated in thousands of dollars. Executive Summary We are the world's leading provider of AI-powered solutions for social impact. Serving nonprofits, educational institutions, companies committed to corporate social responsibility and individual change makers, we propel impact at scale with the sector’s most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. We have operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud and hosted environments; and (ii) providing payment and transaction services. Business Update We delivered another quarter of solid execution against our operating plan, with continued focus on operational efficiency and product innovation. AI initiatives remain an important area of emphasis—both in the capabilities we are delivering to customers and in the way we operate the business. During the first half of 2026, we expanded the availability of AI-enabled capabilities across our product portfolio and launched our first agentic AI solution, the Blackbaud fundraising development agent, into general availability. This solution is designed to assist fundraising teams by automating certain outreach and stewardship activities within existing workflows, using customer-permissioned data and operating under defined governance and user controls. The fundraising development agent is currently being offered under a subscription pricing model. While commercialization remains in the early stages, annual subscription pricing is generally in the tens of thousands of dollars, depending on customer size and use case. We expect this offering to be marketed both to existing customers as an incremental subscription and to prospective new customers as part of our broader product portfolio. During the second quarter, we continued to expand customer deployments and evaluate adoption trends, operational impacts and potential financial contributions as part of our ongoing planning and investment process. Recently, we also announced four additional Agents for Good solutions planned for future release, including the Data Health Agent, Admissions Agent, Digital Marketing Agent and Accounts Payable Agent. These solutions are intended to help customers automate administrative processes, improve productivity and make more informed decisions within existing workflows. Together, these planned offerings reflect our continued investment in agentic AI and a significant opportunity to deliver innovative capabilities across our portfolio, with the potential to help customers increase capacity, improve operational efficiency and advance their missions within the solutions they already use. Adoption of AI-enabled functionality continued across portions of our customer base during the quarter. More than half of our Raiser's Edge NXT customers utilize machine-learning-enabled donor prospecting capabilities, which leverage historical and behavioral data to support fundraising activities. These capabilities are supported by proprietary Blackbaud data, licensed datasets, benchmarking data and other philanthropic datasets, all subject to our cybersecurity and data governance framework. We also continued to apply AI internally to improve efficiency across engineering, sales and marketing, customer success and the back office. During the quarter, our engineering teams increased their use of approved generative AI development tools to accelerate software development and issue remediation, contributing to productivity improvements and faster delivery of enhancements. We are also applying AI to support lead qualification, sales development, customer support and other operational processes. [[GREPCENT_TABLE]] [["Second Quarter 2026 Form 10-Q","","21"]] [[/GREPCENT_TABLE]] Table of Contents Blackbaud, Inc. (Unaudited) In February 2026, we announced our intention to repurchase between 5% and 10% of our outstanding common stock as of December 31, 2025 during the course of 2026 under our stock repurchase program. During the three months ended June 30, 2026, we repurchased an aggregate of 797,795 shares for $28.0 million. During the six months ended June 30, 2026, we repurchased an aggregate of 2,398,852 shares for $110.1 million. Including net share settlement of employee stock compensation, these repurchases represent approximately 6.2% of our outstanding common stock as of December 31, 2025. As of June 30, 2026, $850.4 million remained available under our stock repurchase program. Over the long term, we expect stock repurchases to remain an important component of our capital allocation strategy, subject to market conditions, business performance, leverage considerations, and other factors. We anticipate utilizing at least 50% of our free cash flow from 2026 to 2030 for stock repurchases. See discussion of our Non‑GAAP Financial Measures below. Financial Summary [[GREPCENT_TABLE]] [["Total revenue ($M)","","Income from operations ($M)"],["YoY Growth (%)","","YoY Growth (%)"]] [[/GREPCENT_TABLE]] Revenue increased by $8.6 million and $19.8 million, during the three and six months ended June 30, 2026, respectively, when compared to the same periods in 2025, driven largely by the following: [[GREPCENT_TABLE]] [["","+","","Increases in contractual recurring revenue of $6.2 million and $13.1 million, respectively, primarily related to the positive impact of our pricing initiatives and the demand of our cloud solutions"],["","+","","Increases in transactional recurring revenue of $2.8 million and $9.1 million, respectively, primarily due to increases in volume for our Blackbaud Integrated Payments and Blackbaud Tuition Management offerings and, to a lesser extent, positive results related to pricing initiatives; also contributing to the increases in transactional recurring revenue during the six months ended June 30, 2026 was an increase related to fluctuations in foreign currency exchange rates of $1.6 million"],["","-","","Decrease in one-time consulting revenue of $2.4 million, for the six months ended June 30, 2026, primarily due to fewer sales of implementation and customization services"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["22","","Second Quarter 2026 Form 10-Q"]] [[/GREPCENT_TABLE]] Table of Contents Blackbaud, Inc. (Unaudited) Income from operations increased by $4.7 million and $36.4 million, during the three and six months ended June 30, 2026, respectively, when compared to the same periods in 2025, driven largely by the following: [[GREPCENT_TABLE]] [["","+","","Decrease in acquisition and disposition-related costs within general and administrative expenses of $24.4 million, during the six months ended June 30, 2026, primarily related to our release from our lease for office space in Washington, DC, which occurred during February 2025 and did not reoccur in 2026"],["","+","","Increases in total revenue, as described above"],["","+","","Decreases in third-party contractor costs of $4.7 million and $8.1 million, respectively, primarily due to transition of work to employees in our Global Capability Center (\"GCC\") in Hyderabad, India, decreased use of outside contractors and completion of prior year investments. For the six months ended June 30, 2026, the decrease was partially offset by an increase in investment in AI innovation."],["","+","","Decreases in stock-based compensation expense of $4.5 million and $2.8 million, respectively, primarily due to estimated overall Company performance against 2026 goals at target levels compared to prior-year expectations above target. For the six months ended June 30, 2026, the decrease was partially offset by certain executive retirements in the first quarter."],["","+","","Decrease in Security Incident-related expenses of $2.6 million, during the six months ended June 30, 2026, that occurred during 2025 that did not reoccur in 2026. For more information, see Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 18, 2026."],["","-","","Increases in advertising costs of $2.1 million and $2.8 million, respectively, primarily due to increased digital marketing spend related to our consumer-facing fundraising platform, JustGiving, as well as increased marketing related to raising awareness for our new AI offerings"],["","-","","Increases in third-party software costs of $2.0 million and $4.4 million, respectively, related to internal solutions we use to run our business"],["","-","","Increases in compensation costs other than stock-based compensation of $1.6 million and $2.7 million, respectively, primarily due to transition of work previously performed by third-party contractors to employees in our GCC in Hyderabad, India (as discussed above), and prior year merit-based salary increases"],["","-","","Increases in hosting and data center costs of $1.4 million and $2.1 million, respectively, as we continue to migrate our cloud infrastructure to leading public cloud service providers and make investments in security"],["","-","","Increase of $2.4 million, during the six months ended June 30, 2026, due to the nonrecurrence of a first half 2025 contra expense for transition services associated with the EVERFI disposition in December 2024"]] [[/GREPCENT_TABLE]]                                                                                                                                                                                                                     We are continuing to make critical investments in the business in areas such as innovation, AI, cybersecurity, and our continued shift of cloud infrastructure to leading public cloud service providers. We continuously seek opportunities to optimize our portfolio of solutions to focus time and resources on innovation that will have the greatest impact for our customers and the markets we serve, and drive the highest return on investment. To that end, we will continue to simplify and rationalize our portfolio through product sunsets and divestitures of non-core businesses and technologies. [[GREPCENT_TABLE]] [["Second Quarter 2026 Form 10-Q","","23"]] [[/GREPCENT_TABLE]] Table of Contents Blackbaud, Inc. (Unaudited) Gross dollar retention Our recurring subscription contracts are typically for a term of three years at contract inception with standard three-year renewals thereafter. In recent periods, we have experienced an increase in longer‑term customer contracts. We now have approximately 90% of our contractual recurring revenue on 3-year or longer contracts and approximately 25% on 4-year or longer contracts. A key factor to our overall success is the renewal and expansion of our existing subscription agreements with our customers. Management uses gross dollar retention in analyzing our success at delighting our customers with innovative and cloud solutions. Gross dollar retention is defined as contracted annual recurring revenue ("CARR") divided by beginning CARR with a measurement period of twelve months. For the twelve months ended June 30, 2026, our gross dollar retention was appr [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1280058/000128005826000006/blkb-20251231.htm Complete FY 2025 MD&A: /company/BLKB/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-02-18 Report date: 2025-12-31 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Item 1A Risk factors and our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis presents financial information denominated in millions of dollars which can lead to differences from rounding when compared to similar information contained in the consolidated financial statements and related notes, which are primarily denominated in thousands of dollars. Executive Summary We are the world's leading provider of AI-powered solutions for social impact. Serving nonprofits, educational institutions, companies committed to corporate social responsibility and individual change makers, we propel impact at scale with the sector’s most intelligent solutions for fundraising and engagement, education solutions, financial management and CSR and grantmaking. We have operations in the United States, Australia, Canada, Costa Rica, India and the United Kingdom, supporting users in 100+ countries. Our revenue is primarily generated from the following sources: (i) charging for the use of our software solutions in cloud and hosted environments; and (ii) providing payment and transaction services. Operating Initiatives Supporting Long-Term Growth and Margin Improvement •Product Innovation and Delivery A central element of our long‑term strategy is the disciplined integration of AI across our products, platform and internal operations, which management views as foundational to driving operating leverage, enhancing customer outcomes and supporting sustainable growth over time. Our product innovation efforts have focused on two primary areas: (i) advancing AI across the portfolio, and (ii) enhancing product connectivity and interoperability to streamline customer workflows. These enhancements are designed to help customers improve fundraising outcomes while reducing administrative burden. Through our multi-year Intelligence for Good® initiative, we continue to integrate machine learning and AI-driven capabilities into our products to improve efficiency and support better outcomes for our customers. Our machine learning features for prospect identification have been adopted by more than half of Raiser's Edge NXT® customers. We have also introduced generative AI features across multiple products, primarily supporting the composition of donor and constituent communications. In late 2025, we released Blackbaud AI Chat, which provides contextual responses within our solutions and assists users in completing tasks more efficiently. At bbcon®, our annual user conference in October 2025, we launched Agents for Good™, our agentic AI suite, designed to augment customer teams with virtual AI-driven assistants capable of autonomously executing complex workflows across fundraising, finance and corporate impact functions. These innovations expand the ways customers can use our solutions and are expected to contribute to future bookings, product adoption and customer retention. •Targeting Mid-Single-Digit Revenue Growth Contractual Recurring Revenue (~64% of total revenue) Contractual recurring revenue is driven by new‑customer bookings, cross‑sell and upsell activity within our existing customer base and the retention of existing customer revenue. Our sales organization includes teams focused on both new logo acquisition and expansion within existing customers. In addition to these motions, our new product opportunities (such as Agents for Good discussed above) provide our customer account teams with incremental solutions [[GREPCENT_TABLE]] [["38","","2025 Form 10-K"]] [[/GREPCENT_TABLE]] Table of Contents Blackbaud, Inc. to sell into existing customers. These three motions—new logo, cross-sell/upsell, and new product—support our multi-year “land and expand” strategy. Most of our software customers now operate on standard three‑year contract terms with mid-to-high single-digit price increases at renewal and embedded annual price increases. These terms provide improved revenue visibility and are expected to contribute to stability in retention rates. Revenue from these arrangements is generally recognized ratably over the contract term. While our contract renewal program is designed around three‑year terms, more than 20% of renewing customers have elected to enter into four‑year or longer contracts. Accordingly, our customer base is primarily composed of three‑year contracts, with over 20% of customers committed under extended‑term arrangements, which contributes to revenue visibility while extending the duration over which renewals occur. Because revenue from these contractual arrangements is recognized ratably over the contract term, changes in contract duration affect the period over which revenue is recognized but do not change the pattern of revenue recognition within the contract. To the extent contracts include embedded annual price escalators, the total fees attributable to the subscription-based software solutions are recognized on a straight-line basis over the term of the arrangement, resulting in a more even pattern of revenue recognition over longer periods. Accordingly, period‑over‑period revenue growth continues to be driven primarily by the retention of existing customer revenue, combined with new bookings, expansion activity and contractual renewals with price increases and embedded annual price escalators over the contractual term. Extended‑term arrangements contribute to improved visibility into future revenue and cash flows. Renewal performance can vary from year to year due to the size and composition of renewal cohorts. Approximately 40% of our existing customer contracts are due for renewal in 2026, compared to approximately 30% in 2027 and approximately 30% in 2028. The contractual annual recurring revenue dollars up for renewal associated with the 2026 renewal cohort are approximately 40% higher than those up for renewal in 2025, reflecting the normal progression of our multi-year contract renewal cycle and the timing of customer renewals. Because the 2026 cohort is meaningfully larger, we may experience higher churn dollars in that year relative to prior years. These cohort dynamics are a normal part of our renewal cycle and can influence year-over-year revenue trends, even when underlying customer retention patterns remain stable. Transactional Recurring Revenue (~34% of total revenue) Transactional recurring revenue is diversified across multiple activity types. The primary components of this revenue stream—and their associated products—include: ◦Donation Processing (~55%) - support by Blackbaud Integrated Payments, which powers donation activity across our fundraising and CRM solutions. ◦Consumer Giving (~20%) - driven by JustGiving, which facilitates individual, peer-to-peer and community-driven giving. ◦Tuition Management (~20%) - generated through Blackbaud Tuition Management, which processes tuition, fees and related financial transactions for K-12 private schools. ◦Event‑based Usage (~5%) - derived from usage-based transactions across certain registration, ticketing and event-related workflows within our product suite. The diversity of these underlying transaction types has contributed to consistent high-single-digit growth in transactional recurring revenue in recent years. In certain periods, transactional recurring revenue may benefit from temporary increases in charitable giving related to isolated events, which can contribute to short‑term variability in transaction volumes. Future growth in this category will depend on volume (e.g., donation activity, giving behavior, tuition payments), same‑store volume trends, the shift toward donor online giving, customer adoption of our payments capabilities and pricing optimization initiatives. Certain components of transactional revenue—as with the broader social good sector—are influenced by external factors such as giving patterns, macroeconomic conditions and seasonal activity. We have experienced continued growth in donation processing, consumer giving and tuition management, have implemented targeted rate increases across select areas of our payments portfolio, and are executing additional [[GREPCENT_TABLE]] [["2025 Form 10-K","","39"]] [[/GREPCENT_TABLE]] Table of Contents Blackbaud, Inc. optimization initiatives intended to enhance the donor experience and support long-term transactional revenue expansion. •Operating Efficiency and Margin Improvement We are focused on improving operating efficiency and enhancing profitability over time. This includes actions to optimize our workforce, improve productivity, modernize our technology platform and simplify our cost structure. Consistent with this focus, we are applying AI across our internal operations as a tool to support productivity, scalability and operational effectiveness over time. We have taken several steps to improve efficiency in recent years, including reductions in headcount, optimization of our real estate footprint, renegotiation of key vendor contracts, continued migration of our product infrastructure to public cloud environments and planned closure of our two remaining legacy private data centers. We are also deploying AI-enabled tools across our internal operations, including research and development, customer operations and general and administrative functions, to automate routine activities, accelerate workflows and support internal productivity, while maintaining appropriate controls and governance. As part of our multi-year global workforce strategy, we are expanding our global footprint through the continued build-out of our Global Capability Center ("GCC") in Hyderabad, India. This expansion enhances our access to talent, enables labor arbitrage while maintaining a high quality of work, and supports a follow-the-sun operating model. Our adoption of AI complements this strategy by informing how we assess roles, skill requirements and productivity opportunities as our operating model evolves. Beginning in 2024, we have relied on a combination of (i) insourcing certain roles previously performed by third parties into the GCC, (ii) evaluating roles and required skill sets, including opportunities created through our adoption of AI, to determine whether positions that become vacant through attrition should be backfilled within the GCC, and (iii) opportunistically transitioning additional roles to the GCC. We expect to continue this approach as we execute the next phase our global workforce strategy through 2027. In connection with these efforts, we currently expect to incur pre‑tax GCC workforce transition costs of $6 million to $8 million in 2026, consisting primarily of severance and other employee transition‑related expenses. These costs will be recognized as incurred as impacted employees are notified and related services are received. Because planning for later phases of this multiyear initiative remains ongoing, our current estimates relate only to expected costs in 2026. We expect to provide updates as planning progresses. We expect the actions taken in 2026, together with later phases of the initiative, to begin generating operating cost efficiencies starting in 2027, although the timing and magnitude of these benefits will depend on the pace of execution, role transitions, technology adoption and other operational factors. •Stock repurchase program On December 1, 2025, our Board of Directors reauthorized, expanded and replenished our stock repurchase program by raising the total capacity under the program from $800.0 million to $1.0 billion available for repurchases. The program does not have an expiration date and authorizes the repurchase of shares from time to time in accordance with applicable law [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/BLKB/mda/fy2025/ All MD&A years: /company/BLKB/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/BLKB/mda/fy2024/): filed 2025-02-21; accession 0001280058-25-000010 (https://www.sec.gov/Archives/edgar/data/1280058/000128005825000010/blkb-20241231.htm) - [FY 2023 MD&A](/company/BLKB/mda/fy2023/): filed 2024-02-21; accession 0001280058-24-000013 (https://www.sec.gov/Archives/edgar/data/1280058/000128005824000013/blkb-20231231.htm) - [FY 2022 MD&A](/company/BLKB/mda/fy2022/): filed 2023-02-24; accession 0001280058-23-000006 (https://www.sec.gov/Archives/edgar/data/1280058/000128005823000006/blkb-20221231.htm) - [FY 2021 MD&A](/company/BLKB/mda/fy2021/): filed 2022-03-01; accession 0001280058-22-000010 (https://www.sec.gov/Archives/edgar/data/1280058/000128005822000010/blkb-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 7372 Services-Prepackaged Software) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity Macro-to-micro threads including this sector: [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/BLKB.md · JSON record: /company/BLKB.json · verified financials: /company/BLKB/financials.json / /company/BLKB/financials.csv · machine TOC for the whole site: /llms.txt